Increasingly rapid mobility of information and capital is forcing firms to become ever more nimble. Constant change within organizations and mobility of workers among firms require everyone to keep learning all the time. Learning includes the transfer of existing information, knowledge, and skill from those who have them to those who need them. It also includes the discovery of previously unknown facts and principles, both to improve current routines and to handle new problems. Within firms, the accumulation of many small new discoveries is vital to the continuous improvement of products, services, and methods of production. This is a knowledge-based economy. More importantly, it is learning-based because the success of companies and individuals depends especially on how fast new information can be acquired and assimilated.
More rapid change in markets and technologies makes it relatively more efficient to locate the creation and acquisition of productive knowledge close to the actual productive process. When knowledge and skill related to equipment, software, and operating procedures are developed outside the work situation, they are increasingly likely to be obsolete before they can be put to use. Growing evidence points to the cost-effectiveness of work-based compared to school-based training (Elias, Hernaes, & Baker, 1994; Middleton, Ziderman, & Van Adams, 1993). In particular, the worksite is the best place to generate ideas about continuous, incremental improvement in working methods. For these reasons, firms and schools alike are displaying greater interest in how work itself generates productive competence (Berryman & Bailey, 1992; Lave & Wenger, 1991).
When business firms operate in competitive markets without institutional supports for training, they tend to view training as an expense to be minimized. Employers would generally prefer to hire ready-trained workers--or buy or affiliate with another company that possesses the desired expertise--than provide the training themselves. Institutional structures that overcome these tendencies are the dual system for initial vocational training in German-speaking countries, the French system for continuing staff development, and the Japanese system of long-term employment contracts for core employees. In each of these cases, special economic incentives have been created to override individual firms' reluctance to provide training (Berton, Podevin, & Verdier, 1991; Koike, 1988; Soskice, 1994).
A basic reason why firms generally prefer to minimize their outlay for training is that they lose their investment when employees leave (Becker, 1964; Lynch, 1994; Stern & Ritzen, 1991). Increasing mobility of employees among firms should therefore tend to strengthen employers' reluctance to offer training.
On the other hand, the more rapid obsolescence of work-related knowledge and skill makes it more difficult for employers to find exactly what they need on the open market. They must somehow develop it themselves. Furthermore, as firms offer less employment security, they may try to compete for the most qualified people by offering instead greater opportunity for self-improvement on the job. The opportunity to acquire skill and knowledge that may be useful in a future job becomes more valuable for employees as there is less assurance of remaining with the current employer for a long time. A good case in point is the temporary staffing business itself. One firm that has grown as a direct result of the trend toward more short-term employment is Manpower, Inc., which in 1992 employed a larger number of people than any other U.S. company. Manpower, Inc. provides temporary staffing to other companies and has created a highly structured method for enabling its employees to consolidate and develop their skills and knowledge as they move from one assignment to another (Seavey & Kazis, 1994).
In the absence of institutional structures or incentives that support training, the main strategy enterprises can use to minimize their training costs and at the same time promote employee development is on-line learning. This means acquiring skill or knowledge at one's regular work station and in conjunction with the regular work process, instead of through classes or instructional activities at a different location. Learning that is embedded in the work process inherently entails less opportunity cost than learning off-line. Like just- in-time inventory control, on-line learning avoids unnecessary investment and minimizes deterioration of knowledge and skill from non-use. The need to solve an immediate problem also provides both a motivation to learn and a context that makes new information meaningful.
Firms are developing new practices to promote on-line learning. There is no systematic evidence about which arrangements are most effective, but some of the emerging practices can be described as follows:
Cross training by coworkers involves creating teams of workers with complementary skills and knowledge, who teach one another. Such arrangements have become commonplace in manufacturing, spurred by the diffusion of the Japanese model of "lean production" (Womack, Jones, & Roos, 1990). Firms in service industries are also increasingly organizing employees into teams and encouraging members to share knowledge and information. For example, customer service representatives who formerly carried out highly fragmented tasks are now more often grouped into teams with responsibility for a broader range of functions. The reorganization requires team members to train one another in their respective specialties. One insurance company has created a written list of all the separate tasks a team should perform and pays individual team members additional salary if they master more of these tasks; managers have observed that employees now use idle moments to exchange work-related information instead of talking about other things (Brown, Reich, & Stern, 1993).
Job rotation gives individuals an opportunity to broaden or deepen their skills through exposure to a planned sequence of tasks. This is a hallmark of human resource development in Japanese firms where employees normally remain with the same employer for a long time (Koike & Inoki, 1990). The long career in one firm makes it possible to broaden knowledge and deepen skills by moving workers through a sequence of related jobs over the course of many years. It is not unusual to find, among the information posted in a work area, a chart displaying the level of competence of each worker in performing the jobs done there and a plan for the next set of assignments designed to increase everyone's competence.
Skill-based pay or pay for knowledge is a major departure from traditional practice in Europe or North America. Standard compensation practice makes an individual's pay for a given period depend on the job classification to which the person was assigned. Skill-based pay adds a salary increment that depends on the individual's demonstrated mastery of certain knowledge or skills, independent of the job actually performed during the pay period. To the extent that salary depends on competence rather than position, employees become more willing, even eager, to accept reassignment to different jobs. A survey in the U.S. by Osterman (1994) found that 30% of establishments awarded skill-based pay to at least some of their employees. This is remarkable given that the idea was unknown in the U.S. until the early 1970s. The principle that pay follows the person, not the job, is also a feature of the compensation system in large Japanese companies.
Formal or informal groups (e.g., quality circles) may be created to discuss problems, develop new procedures, or codify current knowledge or skill. These are well-known as a method for involving employees in solving problems related to quality and efficiency (Applebaum & Batt, 1994; Cole, 1989). In France, small groups of workers in newly emerging jobs have been formed for the purpose of writing down the knowledge and skill required (Barbier et al., 1992). An additional effect of these group activities is to keep employees' minds engaged in thinking about what they are doing, a basic prerequisite for learning.
Suggestion systems reward the contribution of ideas by groups or individuals to improve products or work processes. Incentives may be provided for continual discovery of problems and solutions. Like quality circles, suggestion systems help to engage workers' minds even if the work itself is largely repetitive. Along with quality circles, suggestion systems are used extensively in Japanese firms, some of which elicit an average of one or two suggestions per employee per week; workers are paid a small amount of money for each suggestion, and a larger amount if the suggestion has substantial value to the company.
Off-line training may incorporate "doing by learning" (Stern, 1992a). That is, problems originating in the work itself are analyzed in the course of classroom instruction, resulting in ideas for solutions that can be implemented in the work setting. For example, a class may introduce the concept of cycle time or five-step problem-solving, then ask participants to apply the concept to real problems in their own work. The benefit of on-line learning is achieved by bringing the work process into the classroom.
Certain employees may be designated as mentors or tutors for coworkers. This role has been formally developed to the greatest extent in German initial vocational education where an apprentice must be supervised by a qualified meister. The French have also created the role of tuteur, who supervises young trainees in the workplace (Brochier, Froment, & d'Iribarne, 1990) or who guides regular employees through the requirements to obtain a vocational qualification (Kirsch, 1990).
Written analysis of work problems may be assigned as a condition for promotion or advancement. This is another common practice in Japan where candidates for promotion may be asked to write a 20- to 50-page paper proposing a solution to a particular problem or a set of improvements to current methods. The higher the position, the more substantial the essay.
Job aids may be provided in such forms as computerized "help" menus, databases, and expert systems. The spread of computers in workplaces has made it possible to replace printed manuals, which are clumsy to update, with on-line help functions that can be updated continuously (U.S. Congress, Office of Technology Assessment, 1990). From computer-controlled machining to health care to banking, computer application software, databases, and expert systems increasingly offer on-the-spot guidance and information for workers.
Groups or networks may link different workplaces with similar problems. Billboards and list servers on computer networks provide the means for fast exchange of information. Potentially, this could be an important tool for communicating solutions to problems in different workplaces. However, such communication may be blocked by companies' proprietary interests.
To the extent that on-line learning results in workers becoming more interchangeable and easier to replace, it would increase the bargaining power of employers relative to employees. On the other hand, to the extent that opportunities for additional learning at work are associated with increased reliance on staff members' intellectual contributions, the balance of power shifts in favor of employees. This is reflected in several of the practices described above, including problem-solving groups and systems that reward workers who propose significant new ideas.
Because firms must continually seek improvements in their products, services, and methods of operation, staff are increasingly expected not only to adapt to change but also to initiate it by proposing their own ideas. Increasingly, employers must rely on ideas offered by employees. But what kind of incentive can elicit significant new ideas? Coercion is out of the question. Monetary rewards can induce people to submit large numbers of written suggestions, but the Japanese experience indicates that the changes proposed tend to be tiny. Bigger ideas arise only out of genuine interest. The parent of creativity is curiosity.